CEO Mary Barra testifies before Congress for a third time tomorrow on the automaker’s decade-old ignition-switch defect, this time amid widening recalls of the part and questions about whether the replacement process is moving quickly enough.
The automaker’s financial costs also continue to rise, expected to reach $2 billion for 44 campaigns affecting 20 million vehicles in North America. And although sales of Chevrolet, Cadillac, Buick and GMC products appear to be holding up to the scrutiny,l it remains unclear if the scandal will affect GM’s long-term business health as lawsuits could keep it in the headlines.
Barra’s Wednesday visit to Capitol Hill will give federal lawmakers an opportunity to pursue answers to questions the chief executive could not provide in April, when she often cited an internal investigation the automaker expected would deliver complete findings.
Anton Valukas, a former U.S. attorney and chairman of the Jenner & Block law firm, conducted the inquiry into why it took GM a decade to recall 2.6 million small cars built with the defective switch and linked to 13 deaths and 47 crashes. Barra earlier this month called findings from the 300-page Valukas report “extremely thorough, brutally tough and deeply troubling.”
Barra fired 15 people associated with the debacle, which affected mostly the Chevy Cobalt from the ’03-’10 model years, and disciplined five other employees. She promised to implement every recommendation of the Valukas report and to create a swifter-moving safety organization with a sharper focus and greater access to top executives.
Barra also said earlier this month additional recalls would be forthcoming.
“We are taking an aggressive approach on recalls,” she told employees June 5 in a company broadcast. “This is the new norm.”
To that end GM on Monday issued six new safety recalls, including a sweeping 3.36 million-vehicle campaign in North America targeting the ignition system for a third time. The recall affects large cars mostly built for the ’05-’11 model years, although the campaign does include the previous-generation Chevy Malibu currently being sold to fleet customers.
GM says the ignition switch may not be able to handle extra weight hanging from the car’s slotted ignition key and in a jarring event the switch could move out of the “run” position and into “accessory.” The automaker wants to install an insert resulting in a keyhole instead of a slot.
Last week, GM recalled 511,528 Chevy Camaros, or every one built between the ’10 and ’14 model years because the driver’s knee could bump the key fob and move the switch out of the “run” position. GM wants to provide a new fob and separate ignition key.
Like the original Chevy Cobalt ignition-switch recall, if the switches on the newly recalled vehicles move out of the “run” position, there could be a reduction or loss of vehicle power and equipment such as the power steering, power brakes and airbags might not deploy.
In the case of Monday’s recall, the ignition switches meet GM specifications. The Cobalt switches never did.
In a statement to WardsAuto, the automaker calls the switch “very robust” and “much more resistant” to switching off. In the case of the Camaro, GM says the driver would have to be extremely tall or sitting far forward to bump the key fob.
Barra will be joined in Washington by Valukas, and lawmakers say they intend to compare the attorney’s findings with their own. In a statement from House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA), the lawmakers say despite the “exhaustive” Valukas report, questions remain unanswered regarding the recalls and the subsequent changes Barra’s team have made.
Lawmakers also likely will request an update to GM’s progress on replacing the Cobalt ignition switches, which until last week reportedly had been performed on 154,000 vehicles worldwide, or about 5% of the recall population.
GM’s new-car sales have shown resilience amid the scandal. So far this year, the automaker has sold 1.19 million vehicles in the U.S., up 2.8% against an industry that was 4.8% ahead of last year through the first five months.
GM is expected to soon release a compensation plan for victims of the Cobalt crashes and their families, a report that should shed additional light on whether lawsuits against the automaker will persist for years to come. It is unclear if Barra will detail that plan for lawmakers tomorrow.